We see potential ways to efficiently and effectively evaluate biodiversity risks when constructing public market portfolios.
Key Takeaways
1. Identification and Integration
We believe understanding the impact that companies may have on nature, as well as the impact that nature may have on companies, requires a data-driven and risk-managed approach when constructing portfolios.
2. Detail and Data Granularity
Deep analysis of company-specific revenues allows for a more nuanced perspective on potential biodiversity risks. This can help to generate granular insights on company dependencies upon nature and potential pressures and negative impacts on nature.
3. A Risk-Aware Approach
We find that combining company-specific metrics with a risk-aware approach to portfolio construction may significantly reduce a portfolio’s potential biodiversity risk with a small amount of tracking error.
You can now read the full whitepaper at the link below
